Kaz And House Step Up At Sony, Kutaragi Steps Down

It’s only been a few months since former Sony Computer Entertainment CEO, Kazuo Hirai, was promoted to the head of the company’s consumer products division, but now, he’s been promoted again, as part of a management team re-arrangement at the company. Hirai is now in a chairman role at SCE.

Taking his place as Sony Computer Entertainment’s CEO is Andrew House, who is also the current CEO of Sony Computer Entertainment Europe.

Prior to his role at SCEE, House was responsible for establishing the original PlayStation’s market in North America, and strategizing the launches of the PlayStation 2 and PSP. He also played a key role as the head of Sony’s Third Party Relations unit from the year 2000 onward before ultimately becoming CEO of Sony Computer Entertainment Europe. Jim Ryan, co-COO of SCEE, will replace him as the European division’s CEO.

“In fiscal 2010, we achieved profitability for the first time in five years as a result of group-wide united efforts, including continuous cost reduction for PS3 in which I first took the initiative after assuming President of SCEI in December 2006,” said Hirai.

“We are facing new challenges this year, such as the successful launch of PlayStation Vita and further growth of PS3 platform as well as expansion of non-gaming business. I’m confident that the skills and expertise Andy has gained over two decades working for Sony and SCE Group will contribute enormously in leading the PlayStation business and to bring new initiatives in managing the business in the networked era.”

Additionally, Sony report that “father of the PlayStation,” Ken Kutaragi, has retired from his role as honorary chairman of Sony Computer Entertainment. However, Kutaragi will continue in his role as senior technology adviser of Sony Corporation.

Not surprised to see Kutaragi step down. It seemed early on the honorary title was something of a formal demotion without losing face. They weren’t really happy with PS3 hardware cost (both to produce and develop on) early on, and I take it they lost a decent chunk of change in those first couple years.

I was under the impression that companies expend large amounts of money on investing for the future. Perhaps investments in PS3 hardware has paved the way for a robust PS4 and networked services and home entertainment.

mikanko

When he was given a role of far less responsibility as “honorary chairman” it’s an obvious demotion from CEO.

There were several doom and gloom opinions about the “failure” of the PS3 in 2007. System sales were well below launch expectations and at the current tech at the time they cost over 100$ more to produce than their retail price point.

If Sony had things to do over again it’s very likely they would’ve put a tighter leash on Kutaragi when designing the PS3’s specs to be cheaper to produce, and focus more on having a more user friendly CPU architecture to program on. 360 still has some better looking ports of the same game. It’s much easier to program for and companies can’t afford the time and money to tap out the full potential of PS3’s very different CPU.

It all worked out in the end with tech becoming cheaper to produce, blue ray beating out HD dvd, Xbox 360 failing to grab any reasonable hold on Japans market, and the Wii failing to garner any significant 3rd party support.

Microsoft and Nintendo both have a much stronger hold on the US and European markets than they did in the previous PS2/Xbox/Gamecube era, and because of that it was obvious Kutaragi was being asked to grab a tanto and take one for the team. Kind of sad for the person responsible for both the PS1 and 2.

To add to that, at least the PS3 and Slim models housed some very good hardware. Very long lasting outside of YLOD issues, the 360 had some terrible runs in that department. I disassembled 10:1 360s vs. PS3s.

mikanko

Yeah, it’d be interesting to know how much money Microsoft wound up losing in refurbishing and replacing consoles compared to losses Sony had in those first two years. They took their time cleaning up 360 production till they finally started distributing Jaspers in 2009, so maybe it wasn’t that bad. I’m guessing the cost to produce those early 360s must have been pretty cheap. When Kutaragi was asked to step down in early 2007 it’s probable no one realized just how bad the 360 failure rate was.

Still, the Microsoft hold on the market definitely increased between Xbox/PS2 to Xbox 360/PS3. So I’d guess Microsoft sees their console as the bigger success regardless.

“Investing” is very different from not being profitable for five straight years. :p

thebanditking

I completely agree I think the PS4 and other SCEI devices will benefit from the technology created with PS3. Also from a technology stand point what Kutaragi and crew created was/is impressive, its not every day someone creates a game console that is used by the Air Force as supercomputers or can act as a bonded network to help find a cure for cancer. With out a doubt they took some big risks and have paid for that but in the end I’m glad everyone is not making cheap eco boxes with outdated tech, the industry would never move forward.

thebanditking

“However, Kutaragi will continue in his role as senior technology adviser of Sony Corporation.”
I see no problem here, OK he stepped down from a higher management role but continuing his role in Sony’s hardware development is fine by me. Outside of his crazy antics during press conferences and interviews he is a really smart guy and this is where his talent should be used.

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